AN ALTERNATIVE K500 BILLION NATIONAL BUDGET FOR 2027 AND THE BEGINNING OF A FIVE YEAR ECONOMIC REVOLUTION: TOWARDS A K1 TRILLION NATIONAL BUDGET BY 2031
A nation sitting upon extraordinary mineral wealth, endowed with abundant water, fertile land and an enterprising population has no conceivable economic justification for condemning successive generations to poverty, unemployment and perpetual dependence. The poverty of Zambia is an indictment of the economic policies that have consistently failed to convert our national endowments into widespread household prosperity. We must emancipate our national economic imagination from the debilitating confines of fiscal timidity. We must liberate productive capital, industrialise our provinces, commercialise our rural economies and transform our country into a formidable destination for domestic and international investment.
Today, I present our proposed alternative 2027 national budget of K500 billion, inaugurating a five year economic transformation programme from 2027 to 2031. Our ambition is to double the productive capacity of Zambia’s economy, expand the annual national budget to K1 TRILLION BY 2031, progressively abolish Pay As You Earn (PAYE), substantially increase household purchasing power, mobilise unprecedented investment capital and transform all 116 districts into engines of industrial, agricultural and commercial prosperity.
Our Governing Economic Doctrine is “The Wealth of the National Treasury Must be a Consequence of the Prosperity of the People”
Part I Our economic philosophy and national objectives
Our alternative budget rests upon six economic imperatives. First, the liberation of household purchasing power. We shall progressively reduce taxation on employment income, enabling working citizens to retain more of their earnings, accumulate capital, strengthen household savings and stimulate domestic demand.
Second, the democratisation of productive capital. We shall pursue monetary and banking reforms to increase the availability of affordable credit for agriculture, manufacturing, housing, entrepreneurship and industrial investment.
Third, the transformation of Zambia’s mineral wealth into national industrial capital. We shall reform the mining fiscal regime to secure a greater public return from mineral resources, strengthen taxation of extraordinary profits, promote mineral beneficiation and expand domestic industrial participation.
Fourth, the territorial redistribution of economic opportunity. Our development programme shall be implemented district by district. The 116 districts shall become the principal geographical units of economic planning, productive investment and infrastructure delivery.
Fifth, the mobilisation of domestic and international investment. We shall establish internationally competitive industrial investment zones, targeted fiscal incentives, transparent investment arrangements and institutional financing mechanisms capable of attracting substantial long term capital.
Sixth, the transformation of public expenditure into productive national assets. Every major investment shall be evaluated according to its capacity to generate production, employment, exports, household earnings and enduring economic returns. Our objective is to inaugurate a self reinforcing cycle of rising household purchasing power, expanding business turnover, increased industrial production, employment creation and sustained national revenue growth.
Part II Our proposed fiscal and monetary reforms
1. Progressive abolition of Pay As You Earn
We propose the following three year transition:
Maximum PAYE rate reduced to 15% in 2017.
Maximum PAYE rate reduced to 7.5% in 2028.
Complete abolition of PAYE in 2029.
The Government’s proposed 2027 budget anticipates approximately K35.37 billion in PAYE collections. Our alternative shall provide for a revenue replacement programme incorporating additional mineral revenues, broader business activity, improved tax compliance and expanding economic production. We shall also review the proposed VAT increase from 16% to 16.5%, burdensome transaction levies and taxes that unnecessarily diminish household purchasing power or discourage enterprise formation. We shall reduce VAT to 12%. Our ambition is to allow the people to retain more of the wealth they create and deploy that wealth towards consumption, savings, investment and entrepreneurship.
2. Progressive reduction of statutory reserve requirements
We propose a monetary reform framework designed to unlock banking liquidity for productive investment, subject to the independent monetary policy decisions of the Bank of Zambia. Following the reduction of the statutory reserve requirement on kwacha deposits from 26% to 21% in August 2026, our proposed trajectory is hereunder.
Reduce the kwacha reserve requirement towards 15% in 2027.
Reduce it towards 10% in 2028.
Pursue a 5% target, subject to monetary stability in 2029.
For every K200 billion in eligible deposits, a reduction from 21% to 15% would release approximately K12 billion in required reserves. This liquidity shall be supported by enterprise credit guarantees, development finance institutions, competitive banking reforms and measures to increase lending to productive sectors. Our objective is to reduce the cost of borrowing, stimulate private capital formation and make financing more accessible to farmers, entrepreneurs, manufacturers and emerging businesses.
We recognise that released reserves do not automatically translate into new lending. Our programme shall therefore include mechanisms for productive credit expansion while safeguarding inflation, exchange rate stability and banking system soundness.
3. Reform of the mining fiscal regime
Zambia must secure a greater and more enduring economic return from its mineral endowment. We propose a comprehensive review of mining taxation incorporating progressive mineral royalties, price responsive fiscal instruments, taxation of extraordinary resource profits, stronger transfer pricing enforcement and transparent mineral marketing arrangements.
We shall examine the progressive mining fiscal measures introduced under Finance Minister Ng’andu Magande Z”L in 2008 and adapt appropriate elements to contemporary mining investment conditions. Our objective is to expand mining production while increasing Zambia’s share of mineral revenues and promoting domestic processing, manufacturing and industrial supply chains.
4. Internationally competitive investment incentives
We propose qualifying corporate tax holidays of up to five years for new productive investments, accelerated capital allowances, duty concessions on industrial machinery and transparent investment approval procedures. These measures shall prioritise manufacturing, agro processing, renewable energy, technology, mineral beneficiation and export oriented enterprises. Investment incentives shall be linked to verifiable capital expenditure, employment creation, local procurement and productive performance.
We shall draw upon the developmental experiences of Singapore, Mauritius, Israel, the United Arab Emirates and other successful investment destinations, adapting their most effective policies to Zambia’s circumstances.
5. Mobilisation of private and institutional capital
Our five year ambition is to mobilise at least K1 trillion in cumulative productive investment commitments, subject to independently verified financing arrangements. We shall pursue domestic pension fund participation, insurance sector investment, venture capital, development finance, international institutional investment, infrastructure financing and public private partnerships. Private investment shall be accounted for separately from government revenue and expenditure.
Part III The proposed K500 billion national expenditure framework
We propose a total national expenditure envelope of K500 billion for 2027, of which K260 billion shall be directed towards twelve engines of productive economic transformation.
1. K40 billion for agriculture, livestock, fisheries and agro processing
We shall commercialise agricultural production, expand irrigation, develop fisheries and livestock industries, establish agro processing facilities and strengthen agricultural storage and market infrastructure. The objective is to transform rural households into commercially productive economic participants.
2. K35 billion for electricity generation and transmission
We shall accelerate investment in electricity generation, transmission infrastructure, industrial electrification and rural energy access. Our objective is to establish reliable and competitively priced electricity as a foundation for manufacturing, mining, agricultural processing and technological development.
3. K25 billion for Manufacturing and industrialisation
We shall develop industrial parks, promote domestic manufacturing, finance industrial machinery and establish export oriented production facilities. Every province shall be positioned to develop industries consistent with its productive advantages
4. K25 billion for water infrastructure, dams and irrigation canals
We shall initiate a National Water and Irrigation Corridors Programme, incorporating economically viable reservoirs, canals, irrigation networks and multipurpose water infrastructure. Our objective is to convert Zambia’s water resources into agricultural productivity, industrial opportunity and greater resilience against drought.
5. K20 billion for start-ups, SMEs and entrepreneurial capital
We shall establish enterprise capital facilities, credit guarantees, venture investment partnerships and financing programmes for emerging businesses. Young entrepreneurs, women owned enterprises and commercially viable rural businesses shall receive particular attention.
6. K15 billion for mining beneficiation and mineral industrialisation
We shall promote copper based manufacturing, mineral processing, geological exploration, engineering industries and domestic participation in mineral value chains.
7. K35 billion for railways, roads and strategic logistics
We shall modernise economically productive transport corridors, expand railway freight capacity, develop logistics facilities and connect districts to national and international markets.
8. K10 billion for tourism and hospitality development
We shall develop tourism infrastructure, attract hospitality investment, improve access to destinations and expand community participation in tourism enterprises.
9. K15 billion for digital technology, research and innovation
We shall establish innovation centres, promote technology enterprises, support research commercialisation and develop Zambia’s digital industrial capacity.
10. K15 billion for housing and urban development
We shall expand serviced land, stimulate affordable housing development and mobilise private capital for construction and urban infrastructure.
11. K10 billion for pharmaceutical production and medical industries
We shall promote domestic pharmaceutical manufacturing, medical technologies and healthcare supply chains.
12. K15 billion for technical skills and industrial workforce development
We shall align technical education, engineering, vocational training and entrepreneurial development with the productive requirements of an industrialising economy.
The remaining K240 billion shall accommodate debt obligations, essential public services, healthcare delivery, education, social protection, security, public administration and other statutory expenditure (the detailed appropriation are in the 75 paged whole budget speech I have prepared).
Part IV Taking development to all 116 districts
The district shall become the principal geographical unit of national economic transformation. We propose to earmark K58 billion within the K260 billion productive transformation envelope for district based investment and infrastructure programmes. Under our plan, CDF will be scrapped off. This represents an indicative average of K500 million per district, with actual allocations determined by population, poverty, infrastructure deficits, productive opportunities and investment readiness. Every district shall develop a five year economic transformation plan identifying its agricultural, industrial, commercial, technological, tourism and natural resource potential. Implementation shall be undertaken through accountable district institutions, professional financial management, transparent procurement and independently audited performance.
We shall take public investment to where the people live, take industry to where resources are produced, and take economic opportunity to every district of our country.
Part V Signature national infrastructure programmes
Our proposed budget shall initiate six flagship programmes within the sectoral expenditure allocations as shown below.
The National Water and Irrigation Corridors Programme including strategic reservoirs, irrigation canals, agricultural water distribution and commercially viable multipurpose water infrastructure.
The 116 District Industrialisation Programme covering District enterprise parks, agro processing centres, commercial storage, local manufacturing facilities and investment ready industrial sites.
The National Energy Expansion Programme covering Electricity generation, transmission infrastructure, rural electrification and reliable power for industrial development.
The Copper to Industry Programme including manufacturing of electrical cables, copper components, engineering products and other competitive mineral based industrial goods.
The National Rail and Logistics Modernisation Programme covering productive freight corridors, railway rehabilitation, logistics hubs and improved connections to regional export markets.
The Zambia Enterprise Capital Initiative including Venture capital, credit guarantees, development finance and institutional investment facilities for productive enterprises.
Each flagship programme shall be subject to technical feasibility, transparent procurement, financing appraisal and measurable economic return requirements.
Part VI The five year national fiscal expansion framework
Our proposed annual national expenditure targets are:
2027 at K500 BILLION
2028 at K600 BILLION
2029 at K720 BILLION
2030 at K850 BILLION
2031 at K1 TRILLION
These are ambitious nominal fiscal targets, contingent upon expanded domestic revenues, additional mineral receipts, productive investment returns, improved compliance and sustainable financing. The initial K500 billion budget represents an increase of approximately K215.23 billion over the Government’s proposed 2027 expenditure envelope.
Our detailed fiscal programme shall identify the revenue and other financing arrangements necessary to support these ambitions, including the fiscal transition arising from PAYE reform. We shall pursue accelerated real economic growth, increased exports, industrial diversification and expanding household earnings as the productive foundations of this fiscal transformation.
Part VII Our declaration of national economic purpose
We envisage a Zambia where a child born in a remote village can aspire to the same economic opportunities as a child born in Lusaka. We envisage a Zambia where a farmer becomes an agricultural investor, a market trader becomes a commercial entrepreneur, a young graduate becomes an industrial innovator, and a mining community becomes a centre of manufacturing excellence.
We envisage a Zambia where banks finance productive enterprise, industries compete internationally, households accumulate wealth and every district participates in the creation of national prosperity. We envisage a Zambia where our water nourishes productive agriculture, our minerals sustain industrial development, our electricity powers manufacturing, and our education system produces the engineers, innovators and entrepreneurs of an increasingly prosperous republic. Our ambition is to liberate the productive genius of the Zambian people.
We must replace the debilitating economics of permanent scarcity with a national economic philosophy founded upon capital formation, enterprise development, industrial expansion and productive abundance. The wealth of Zambia must be reflected in the lives of Zambians. The prosperity of the Treasury must arise from the prosperity of households. The strength of our national economy must be demonstrated by the industries we establish, the employment we create, the exports we generate and the wealth our people accumulate.
Let all 116 districts rise. Let household incomes multiply. Let capital flow. Let industries flourish. Let our mineral wealth finance national transformation.
Let Zambia become a Republic of prosperity.
Saviour Chishimba
(Yehudah Ben David)
Jewish Scholar
Principal & Founder
THE PEOPLE’S ACADEMY